Needham has revised its valuation for Monolithic Power Systems (NASDAQ: MPWR), raising the firm's price target to $1,300 from $1,250 and keeping a Buy rating after the company's recent quarterly results. At the time of the revision the shares were trading at $1,155.99, representing a roughly 76.36% gain over the prior 12 months and sitting approximately 5.7% below Needham's new target.
The research note pointed to an improved outlook across Monolithic's business, with particular emphasis on the Enterprise Data segment. Needham expects that segment to expand by more than 50% in fiscal year 2026. That expectation contributes to the brokerage's projection of 26% overall revenue growth for FY2026, which builds on the company's reported 26.43% revenue growth over the last twelve months.
Alongside revenue metrics, Needham highlighted operational signals that suggest healthy end-market demand. The firm noted a book-to-bill ratio well above 1:1 and channel inventory levels sitting at the low end of the company's stated target range, both of which were cited as supportive of the raised price objective.
The upgraded price target is derived from Needham's discounted cash flow valuation. The model uses a terminal price-to-earnings multiple of 40x applied to calendar year 2030 non-GAAP earnings and a discount rate of 10.2% as the basis for the increase.
In a separate corporate announcement, Monolithic Power said its Chief Financial Officer, Bernie Blegen, will retire upon the filing of the company's 2025 annual report.
The timing of Needham's update follows Monolithic Power Systems' fourth-quarter 2025 results, in which the company beat consensus on both the top and bottom lines. Reported non-GAAP earnings per share were $4.79, versus an anticipated $4.73. Quarterly revenue came in at $751.2 million, ahead of an expected $740.23 million. Despite the upside surprises, the stock traded slightly lower in aftermarket session following the release.
Analysts had projected the earnings estimates referenced above, a fact the research note said underscores the company's capacity to outperform forecasts. Taken together, the quarter's results, the upbeat Enterprise Data outlook, and channel demand indicators underpinned Needham's decision to lift its valuation and reiterate its Buy stance.
Market context and implications
Needham's assumptions and the company's reported performance suggest evolving revenue composition toward data-centric end markets and underline the importance of channel inventories and book-to-bill dynamics for near-term revenue visibility. The CFO retirement is a material corporate governance event tied to the upcoming 2025 annual filing.